By Michael Aneiro

Bloomberg News

Back to talking about bonds, mostly.

DoubleLine‘s Jeff Gundlach, hosting a webcast this afternoon, just said he thinks the recent bond sell-off shouldn’t get much worse for a while.

“I don’t think that bond yields are going to move much higher after the move up in May,” Gundlach said, noting that similar moves have occurred in recent quarters and the attendant rises in bond yields have been fairly contained. He said the ten-year Treasury yield will likely top out around 2.30% or 2.35% this time around, and that it would start to hurt equities and the economy if rates rose much more than that, possibly prompting the Fed to intervene by buying yet more bonds.

“If it does go higher, I think the Fed would start talking about increasing QE because I think the economy would get weaker if mortgage rates, for example, went higher,” Gundlach said.

Absent that, Gundlach said the Fed looks like it’s on target to reduce its bond purchases, but he hesitates to use the word “tapering.” More From Gundlach:

I certainly think the Fed is going to reduce [bond purchases]… I think they’re trying to match up the size of bond purchases with the budget deficit, and the budget deficit is coming in below where it was last year, so it makes more sense to right-size (I don’t want to call it tapering) the bond purchases…. The program is designed to distort markets, but to distort markets in a certain way, [and] I think that greatly overestimates the [Fed's] ability for such fine-tuning.

He added that the Fed’s policies are “hollowing out the savings class, the upper middle class, who cant earn any income” on investments.